Sanjus Paper Products-1

7/30/2019 Sanjus Paper Products-1

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INDEX

SL.No.

DESCRIPTION PAGE NO.

1 Introduction

2 Market potential

3 Manufacturing process

4 Flow sheet diagram

5 About the promoter

6 Basis and Presumption

7 Inspection and quality control

8 Production Capacity

9 Pollution control

10 Electrical requirements

11 Financial aspects - Fixed capital

12 Recurring expenditure

13 Working capital assessments

14 Other financial aspects

15 Break-even analysis

16 Repayment Schedule

17 Depreciation

18 Profitability Statement


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MANUFACTURE OF PAPER PRODUCTS(PAPER CUPS)

1. INTRODUCTION

Disposable food service products were initially developed to enhance public

health by improving practices in the food service industry. This requirement when

combined with the environmental threat faced by us at the turn of the 20th Century

and need of strong efforts in order to conserve the environment, gave birth to the

concept of PAPER CUPS. There are several inherent advantages in using Paper

Cups as compared to cups of other materials. These Paper Cups are gaining

popularity all across the globe as a beautiful and stylish way of minimizing exposure

to food borne infections.

Paper Cups have numerous advantages like, they are manufactured in a very

simple process using Food Grade Raw Materials with least waste and are easiest to

recycle. They are ideal for individual servings at all kinds of parties, functions, picnic

occasions, marriages, chat, tea & food joints, etc.

Non-toxic in nature, the shapes and surface designs on these paper cups are

attractive and present an inviting look. These paper cups can also be custom printed

with an outlet's logo, brand punch line or advertising message.

Available in a wide variety of designs, textures, colors and sizes, disposable

paper cups are gorgeous, stylish and eloquent. Adding premium aura wherever

used, these cups are made with utmost care to detail and are a unique addition to

any table setting.

Hence, the future of the proposed unit for manufacturing paper cups is very

vibrant and will be a gesture towards supporting the usage of Eco-friendly products.

A paper cup is a cup made out of paper and often lined with plastic or wax toprevent liquid from leaking out or soaking through the paper. It may be made of

recycled paper and is widely used around our regular life. Landmark events for

common household items are not coming often these days. At its 100th anniversary,

paper cup still retains the imperative status in the worlds drink consumption.

Therefore the object was to dispense a pure drink of water in a new, clean, and

individual drinking cup instead of common jug in public places.


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2. MARKET POTENTIAL

It is necessary to recognize that in a globalize economic environment the

business outlook for any paper product will depend on the global demand supply

balance for that product. For Paper Cups there is production less capacity at a global

level which was built up over the last decade or so in response to a boom in global

growth and increased levels of awareness of eco friendly products. The growth of the

manufacturing sector will be largely influenced by the growth consumption.

A wide range of paper cups are now produced and marketed in India. The

paper cups are reckoned to be a high potential business for India.

Manufacturing Paper Cups is the purpose of satisfying needs and wants ofConsumers is the market place. Developing a strategy for delivering an effective

combination of food grade quality and cost-effective features for consumers within

the target market is done.

The prospects of paper cups depend on the value of customers who utilize it.

But in our country paper cups are used by all the people as it is easy to use, hygienic

and eco-friendly. Hence, the per capita consumption has increased and the demand

for it is recognized. While the demand for paper cups has shown a good growth, the

company will be successful in strategizing its market operations.

As paper cups is a product of daily consumption and necessity, their

marketing will not be a problem as the consumers are aware of the advantages of

using paper cups. The raw materials are indigeneously available and the

manufacturing process is also simple.

SANJUS PAPER PRODUCTS has decided to market their PAPER CUPS

to IT companies, Educational Institutions Canteens, Industrial Canteens,

Restaurants, Fast Foods, Catering People, Tea Shops, Paper Product Dealers and

Super Markets

SANJUS PAPER PRODUCTShas made marketing survey and potential

for our product and had a very good responses. We have the regular market for our

manufacturing capacity. In future SANJUS PAPER PRODUCTS will increase the


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capacity to meet the demand of our product. So it will not be a difficult to find market

for paper cups in this growing paper product industry.

The increasing demand is being vast, thrust for the development of this

industry is very big. SANJUS PAPER PRODUCTS will assimilate novel and

innovative methods to improve its competitiveness for its growth and contribute to

the country.

In conclusion, I would like to stress that present status of the industry is in

very good scope and this industry will provide ample employment opportunities to

the underprivileged of our society.

Therefore to sum up the setting up of PAPER CUP manufacturing unit is

predictable and feasible for its marketing aspects.


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3. MANUFACTURING PROCESS OF PAPER CUPS :

We have proposed to use the Automatic Paper Cup Forming Machine for our

manufacturing process of Paper Cups.

The general structure of paper cup forming machine is composed of three stages.

They are :

1. The first stage : mainly finishes transmission of the paper cup's side-wall

paper, shaping side-wall and transferring them to the second stage after

shaped.

2. The second stage : transmission of the cup-bottom paper, shaping cup-

bottom, joining the shaped side-wall and cup bottom, automatic transmission

and discharging of the shaped cup, and curling the shaped cup's edge.

3. The third stage: mainly includes 45 degree angle separating, preheating,

curling bottom, rouletting, curling rim and so on mechanisms, which are the

important parts in finishing paper cup.


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4. FLOW SHEET DIAGRAM

BLANK BOTTOM

CONE FORMING

+ BOTTOM FIXING

LOADED TO MOULD

BOTTOM KNURLING+TOP KURLING

FINISHED CUP

DELIVERY


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5. About the Promoter

Name :

Father Name :

DOB :

Sex :

Permanent Address :

Marital Status :

Nationality :

Languages Known :

Educational Qualification :

Working Experience :


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6. BASIS AND PRESUMPTION OF THE PROJECT :

i. The process of manufacture is on the basis of double shift of eight + eighthours per day with three hundred working days in a year.

ii. Labor and wages mentioned in profile are as per prevailing local rates.

iii. Interest rate at 12.5% considered in the project

iv. The Promoter contribution will be 10% of the total project cost. However itmay be vary for women entrepreneurs.

v. Subsidy and other concessions may be applicable as per the MSME Act ofTamilnadu 2006.

vi. The capacity of the plant 40,000 nos. of paper cups per day on the doubleshift basis.

7. INSPECTION AND QUALITY CONTROL :

SANJUS PAPER PRODUCTS will strictly adhere to the International FDA

standards and Indian BIS standards in the process of manufacturing Paper Cups

from procuring high quality food grade raw materials to hygienic methods of

packaging, as we know that the satisfaction of the customers is the foundation of any

business.


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8. PRODUCTION CAPACITY PER ANNUM :

Quantity: 40,000 nos. of paper cups per day

1,20,00,000 nos. of paper cups per annum (300 days)

9. POLLUTION CONTROL

The technology adopted for making paper cups is eco-friendly. Cup forming process

is totally automatically done by the machine, only feeding and packaging involves

manual work. The scrap papers created out of this manufacturing process also can

be sold for recycled paper converters. Hence there is no chance of any pollution out

of this industry.

10. Electrical HP Details:

Sl

NoName of the Machine

No: ofMachines /

Units

H.P

Connected

1 Automatic Paper Cup Forming Machines 1 4

2 Other electrical fittings/ lighting etc ---- 1

Total H.P Connected 5


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11. FINANCIAL ASPECTS

11.1. FIXED CAPITAL:

(a) Land & Building :

SL. NO DESCRIPTION AMOUNT .Rs

1 Land & Building (400 - 500 Sq. ft.) 5,000 per month

(b) Machinery and Equipment :

SlNo

DESCRIPTIONNo: of

Machines /(Units in Nos)

Rate(Rs.)

1 Automatic Paper Cup Forming Machines 1 No. 7,50,000

2 Servo Stabilizers ---- 40,000

3 Electronic Weighing Machine 1 No. 15,000

4Office equipment ( Computer, Table Chairetc.,)

1 Set 50,000

5 Plastic Storage Racks 1 No. 20,000

TOTAL 8,75,000


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12. RECURRING EXPENDITURE (PER MONTH):

(A) Raw Material Per Month: Rs.

SL. NO. DESCRIPTION QUANTITY RATE AMOUNT

1Printed Blank

Side Wall2,500 kgs 75.00 1,87,500

2 Bottom Reel Paper 800 kgs. 72.00 57,600

3PP cover & Carton

BoxesAs Required ----- 10,000

TOTAL (A) 2,55,100

(b) Salaries & Wages Per Month : Rs.

SL.NO.

DESCRIPTION NO SALARY AMOUNT

1 Production cum Marketing Manager 1 7500 7,500

2 Machine Operators 2 5000 10,000

3 Checking & Packaging Women 2 3000 6,000

4 Office Assistant 1 3000 3,000

TOTAL 26,500

Perquisites 15 % 3,975

Total (B) 30,475


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C) Utilities per Month: Rs.

SL. NO. DESCRIPTION AMOUNT

1 Power 5 HP 750 Units @ Rs. 5 per Unit 3,750

2 Machine Oil, grease & other consumables 1,000

TOTAL (C) 4,750

(D) Other Expenses Per Month: Rs.

SL. NO. DESCRIPTION AMOUNT

1 Rent 5,000

2 Marketing expenses & Advertisement 3,000

3 Postage and stationery 250

4 Repairs and maintenance 500

5 Traveling and transportation 1,000

6 Insurance 250

7 Telephone & Mobile 2,000

8 Packing Materials 500

TOTAL (D) 12,500

13. RECURRING EXPENDITURE PER MONTH:

a + b + c + d = Rs. 3,02,825/-

Recurring Expenditure for three months = Rs. 9,08,475/-


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14. WORKING CAPITAL ASSESSMENT

SL. NO. DESCRIPTION AMOUNT (RS.)

1Raw Material(Required for One Month)

2,55,100

2Work in progress(Required for One Month)

43,750

3 Finished Goods(Required for 15 Days)

1,50,000

4Bill receivable(Required for 15 days)

2,00,000

TOTAL

SAY

6,48,850

6,50,000


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15. FINANCIAL ASPECTS Rs.

15. a. Total Project Cost

COST OF THE PROJECT AND MEANS OF FINANCE

PARTICULARS Rs. In lakhs

I.COST OF THE PROJECT:

(i) Plant and Machinery 8,75,000

(ii) Working Capital 6,50,000

TOTAL COST OF PROJECT 15,25,000

15. b. MEANS OF FINANCE:

Term loan from Bank 90% 13,72,000

Promoters contribution 10% 1,52,500

TOTAL FINANCE 15,25,000

Finance required from the Bank 13,72,500/-

(Rupees Thirteen Lakhs Seventy Two Thousand Five Hundred Only)


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15. c. Cost of Production Per Annum : Rs.

SL.

NO DESCRIPTION AMOUNT

1 Total recurring cost 36,33,900

2 Interest on Bank Loan @12.5% 1,71,563

3 Total Depreciation on Machinery @15% 1,31,250

4Total Depreciation on furnitures and otherequipments @ 20%

5,000

TOTAL 39,41,713

16. Turnover Per Annum :

Proposed sale of Paper Cups : 1,20,00,000 Nos.

of sizes at market value : 110 ml @ 0.36210 ml @ 0.42

Average Price for Sale of Paper cups

on an average @ Rs. 0.39 x 1,20,00,000 cups

Total Turnover Per Annum : Rs. 46,80,000/-

17. Profit Per Annum :

Turnover - Cost of Production

Rs. 46,80,000 Rs. 39,41,713

Profit per Annum = Rs. 7,38,287/-


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18. % of profit on sales = Profit/annum X 100

Turnover

= 738287 X 100

46,80,000

% of profit on sales = 15.77%

19. Rate of Return = Profit / Annum * 100

Total Capital investment

= 738287 X 100

1525000

Rate of Return = 48.41%


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20. Break Even Analysis:

(1) Fixed expenditure per annum: Rs.

Interest on Loan 1,71,563

Total Depreciation 1,31,750

40% of salary and wages 1,46,280

40% of other expenses & Utilities 1, 82,800=======

TOTAL 5,32,393=======

(2) Profit per annum = Rs. 7,38,287/-

Break Even Point = Fixed Cost / Annum * 100

Fixed cost / Annum + Profit / Annum

= 532393 X 100

1270680

Breakeven = 41.89%


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21. Repayment Schedule

Repayment of total loan Rs. 13.72 lakhs will be repayable in 6 years with 66

installments with 6 months holiday period. The rate of interest has been

calculated @ 12.5% per annum however the rate of interest will be vary while

implementing the project.

(Rs. in lakhs)

YearQuarter

Beginning

PrincipalOutstanding

at thebeginning ofthe Quarter

Repaymentof Principalat Quarter

InterestPrincipal

AndInterest

31-03-2013 December 13.72 0.57 0.43 1.00

March 13.15 0.57 0.41 0.98

31-03-2014 June 12.58 0.57 0.39 0.96

September 12.01 0.57 0.38 0.95

December 11.43 0.57 0.36 0.93

March 10.86 0.57 0.34 0.91

31-03-2015 June 10.29 0.57 0.32 0.89

September 9.72 0.57 0.30 0.88

December 9.15 0.57 0.29 0.86March 8.58 0.57 0.27 0.84

31-03-2016 June 8.00 0.57 0.25 0.82

September 7.43 0.57 0.23 0.80

December 6.86 0.57 0.21 0.79

March 6.29 0.57 0.20 0.77

31-03-2017 June 5.72 0.57 0.18 0.75

September 5.15 0.57 0.16 0.73December 4.57 0.57 0.14 0.71

March 4.00 0.57 0.13 0.70

31-03-2018 June 3.43 0.57 0.11 0.68

September 2.86 0.57 0.09 0.66

December 2.29 0.57 0.07 0.64

March 1.72 0.57 0.05 0.63

31-03-2019 June 1.14 0.57 0.04 0.61

September 0.57 0.57 0.02 0.59


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22. Depreciation

Depreciation has calculated @ written down value method for the period of 6 yearsfor Machinery and other equipments @ 10% & 20% respectively.

(Rs. In Lakhs)

Machinery Depreciation(a) Tools

Depreciation(b)

Total.Depreciation

(a + b)

ValueDep.

7.900.79 0.79

0.750.15 0.15 0.94

W.D.V

Dep.

7.11

0.71 0.71

0.60

0.12 0.12 0.83

W.D.V

Dep.

6.40

0.64 0.64

0.48

0.09 0.09 0.73

W.D.V

Dep.

5.76

0.57 0.57

0.39

0.07 0.07 0.64

W.D.V

Dep.

5.19

0.51 0.51

0.32

0.06 0.06 0.57

W.D.V

Dep.

4.68

0.46 0.46

0.26

0.05 0.05 0.51


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23. Profitability Statement

S. NoYear

Capacity

Utilization

1

65%

2

70%

3

75%

4

80%

5

85%

6

90%

1 Turnover 46.80 49.14 51.59 54.17 56.88 59.72

2 Raw Materials 30.61 32.14 33.74 35.43 37.20 39.06

3 Manpower 3.65 3.83 4.02 4.22 4.43 4.65

4 Utilities 0.57 0.59 0.62 0.65 0.69 0.72

5OtherExpenses

1.50 1.57 1.65 1.73 1.82 1.91

6 Depreciation 0.94 0.83 0.73 0.64 0.57 0.51

7 Total Interest 1.70 1.48 1.16 0.86 0.54 0.51

8Repayment ofLoan

2.29 2.29 2.29 2.29 2.29 2.29

9 Total (2 to 8) 41.3 42.7 44.2 45.8 47.5 49.7

10Profit beforeTax

5.54 6.41 7.38 8.35 9.34 10.10

11 Provision forTax1.50 2.00 2.50 3.00 3.50 4.00

12Profit afterTax

4.04 4.41 4.88 5.35 5.84 6.07

13LessDepreciation

0.94 0.83 0.73 0.64 0.57 0.51

14 Cash Accrual 3.10 3.58 4.15 4.71 5.27 5.56

Documents

Sanjus Paper Products-1